WHY INVEST?

Welcome back to my blog. Starting from today I will try something different. Each week, I am going to create a series of three to four discussions which will dive deeper into different topics each and every week. For instance, this week we are talking about why investing is important and next week it can be about stocks. Each discussion will only roughly 250 words. I call it the MONEY PICK (MP) which will serve as an excellent educational opportunity for all of us. I hope you will find something new and helpful as we go along. This week MP will be about the important of investing. We will look into why investing is important and what benefits investing provides.

I put money into a saving account. Isn’t that enough?

Money sitting in the bank doesn’t do anything for you. Don’t get me wrong,  saving is important. Having a three to six month emergency fund in your saving account is where it all started. A saving account from Wells Fargo only offer 0.01% Interest rate or Annual Percentage Rate (APR) and 0.01% Annual Percentage Yield (APY). This means that if you put $1,000 into your saving account, you will earn $0.10 in interest after 1 year.  It is TERRIBLE isn’t it.

Different banks offer variety of interest rates for their saving account. But over all, they are worthless and you shouldn’t let your money sit in there long term. Going back to our topic of discussion, investing is important because you need money to work for you. Investment takes time to grow. Time is the most valuable item that you have ever own in my opinion so let’s not wasting time by putting your hard earn money into low return saving account. 

RELATED: INVESTING WITH BETTERMENT: $380/Wk FOR 12 MONTHS SO FAR

One educational learning point today is: You might notice APR and APY sounds the same, they are totally different. For starters, APY, or annual percentage yield, takes into account compound interest, but APR, which stands for annual percentage rate, does not. If you want to understand more, you can read about it here 

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